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Firm specific and macroeconomic determinants of share prices of Nepalese commercial banks / Arun Kumar Sapkota
Title : Firm specific and macroeconomic determinants of share prices of Nepalese commercial banks Material Type: printed text Authors: Arun Kumar Sapkota, Author Publication Date: 2016 Pagination: 92p. Size: GRP/Thesis Accompanying material: 6/B Languages : English Descriptors: Macroeconomics Class number: 332.632 Abstract: Stock market is an important part of the economy of a country. The stock market plays a pivotal role in the growth of the industry and commerce of the country that eventually affects the economy of the country to a great extent(Fama and French, 2007). It works as the channel through which the public savings are channelized to industrial and business enterprises. Mobilization of such resources for investment is certainly a necessary condition for economic take off, but quality of their allocation to various investment projects is an important factor for growth. This is precisely what an efficient stock market does to the economy. Delcoure (2012) stated that even in less developed countries, capital markets are able to mobilize domestic savings and allocate funds more efficiently. In such markets, long term economic growth is promoted by providing investors with liquidity, risk diversification, information about firms, corporate control and saving mobilization. The stock market is an important source of company finance, which offers greater flexibility than borrowing from banks.
In the securities market, whether the primary or the secondary market, the price of equity is significantly influenced by a number of factors which include book value of the firm, dividend per share, earnings per share, price earnings ratio and dividend cover (Gompers, Ishii &Metrick, 2003). Corwin (2003) identifies uncertainty and asymmetric information as a strong influence on the firm’s equity pricing and as a matter of fact leads to under priced instrument. In the light of the preceding literature review, both micro and macroeconomic factors have impact on equity pricing in the stock market. The impact differs from firm to firm, industry to industry, economy to economy and from time to time, but one comforting conclusion is that most of the factors appear to have the same behavior regardless of time, industry or firm constraints. For instance, increased inflation and interest rates, declining dividends, earnings, and poor management have negative impact on equity pricing and vice-versa.
The performance of the stock market is a strong indicator of general economic performance and is an integral part of the economy of the country. With the introduction of free and open economic policies and advanced technologies, investors are finding easy access to stock markets around the world. The fact that stock market indices have become an indication of the health of the economy of a country indicates the importance of stock markets. This increasing importance of the stock market has motivated the formulation of many theories to describe the working of the stock markets (Gupta, Chevalier &Sayekt, 2008).
The major purpose of this study is to identify the firm-specific and macroeconomic determinants of share price in Nepalese commercial banks. The specific objectives of this study are: a) to examine the relationship between macro-economic factors such as GDP, inflation & interest rate and share prices, b) to analyze the impact of ROA and P/E ratio on share price, c) to evaluate the effect of EPS and DPS on share price, d) to determine the impact of leverage on share price, e) to find out which of the macro and firm specific factors explain the variation in share price.
This study has employed descriptive research design and causal comparative research design to deal with issues associated with factors influencing share price of the commercial banks in the context of Nepal. The descriptive research design has been adopted for fact finding and search adequate information about impact of firm-specific and macroeconomic variables on market price of the share. This study also employs causal comparative research design to determine the effect of bank specific and macroeconomic variables on share price of Nepalese commercial banks.The secondary data for the study are collected from various sources such as annual report of the sample banks, NRB data base, books and journals.
The result shows that there is positive relationship between earning per share, dividend per share, price earning ratio, return on assets, gross domestic product and market price of share.Likewise, the result shows that there is negative relationship between leverage, inflation, interest rate and market price of share.The result also shows that there is positive relationship of earning per share, dividend per share, price earning ratio, gross domestic product withstock return and excess return whereas there is negative relationship of leverage, return on assets, inflation and interest rate withstock return and excess return. The study revealed that earning per, dividend per share, price earning ratio, leverage, return on assets and gross domestic product are among the most dominant variables that affect the market price of share in the context of Nepalese commercial banks.
Firm specific and macroeconomic determinants of share prices of Nepalese commercial banks [printed text] / Arun Kumar Sapkota, Author . - 2016 . - 92p. ; GRP/Thesis + 6/B.
Languages : English
Descriptors: Macroeconomics Class number: 332.632 Abstract: Stock market is an important part of the economy of a country. The stock market plays a pivotal role in the growth of the industry and commerce of the country that eventually affects the economy of the country to a great extent(Fama and French, 2007). It works as the channel through which the public savings are channelized to industrial and business enterprises. Mobilization of such resources for investment is certainly a necessary condition for economic take off, but quality of their allocation to various investment projects is an important factor for growth. This is precisely what an efficient stock market does to the economy. Delcoure (2012) stated that even in less developed countries, capital markets are able to mobilize domestic savings and allocate funds more efficiently. In such markets, long term economic growth is promoted by providing investors with liquidity, risk diversification, information about firms, corporate control and saving mobilization. The stock market is an important source of company finance, which offers greater flexibility than borrowing from banks.
In the securities market, whether the primary or the secondary market, the price of equity is significantly influenced by a number of factors which include book value of the firm, dividend per share, earnings per share, price earnings ratio and dividend cover (Gompers, Ishii &Metrick, 2003). Corwin (2003) identifies uncertainty and asymmetric information as a strong influence on the firm’s equity pricing and as a matter of fact leads to under priced instrument. In the light of the preceding literature review, both micro and macroeconomic factors have impact on equity pricing in the stock market. The impact differs from firm to firm, industry to industry, economy to economy and from time to time, but one comforting conclusion is that most of the factors appear to have the same behavior regardless of time, industry or firm constraints. For instance, increased inflation and interest rates, declining dividends, earnings, and poor management have negative impact on equity pricing and vice-versa.
The performance of the stock market is a strong indicator of general economic performance and is an integral part of the economy of the country. With the introduction of free and open economic policies and advanced technologies, investors are finding easy access to stock markets around the world. The fact that stock market indices have become an indication of the health of the economy of a country indicates the importance of stock markets. This increasing importance of the stock market has motivated the formulation of many theories to describe the working of the stock markets (Gupta, Chevalier &Sayekt, 2008).
The major purpose of this study is to identify the firm-specific and macroeconomic determinants of share price in Nepalese commercial banks. The specific objectives of this study are: a) to examine the relationship between macro-economic factors such as GDP, inflation & interest rate and share prices, b) to analyze the impact of ROA and P/E ratio on share price, c) to evaluate the effect of EPS and DPS on share price, d) to determine the impact of leverage on share price, e) to find out which of the macro and firm specific factors explain the variation in share price.
This study has employed descriptive research design and causal comparative research design to deal with issues associated with factors influencing share price of the commercial banks in the context of Nepal. The descriptive research design has been adopted for fact finding and search adequate information about impact of firm-specific and macroeconomic variables on market price of the share. This study also employs causal comparative research design to determine the effect of bank specific and macroeconomic variables on share price of Nepalese commercial banks.The secondary data for the study are collected from various sources such as annual report of the sample banks, NRB data base, books and journals.
The result shows that there is positive relationship between earning per share, dividend per share, price earning ratio, return on assets, gross domestic product and market price of share.Likewise, the result shows that there is negative relationship between leverage, inflation, interest rate and market price of share.The result also shows that there is positive relationship of earning per share, dividend per share, price earning ratio, gross domestic product withstock return and excess return whereas there is negative relationship of leverage, return on assets, inflation and interest rate withstock return and excess return. The study revealed that earning per, dividend per share, price earning ratio, leverage, return on assets and gross domestic product are among the most dominant variables that affect the market price of share in the context of Nepalese commercial banks.
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Barcode Call number Media type Location Section Status 159/D 332.632 SAP Thesis/Dissertation Uniglobe Library Social Sciences Available Impact of bank specific and macroeconomic factors on bank profitability:a case of Nepalese commercial banks / Anup Paudel
Title : Impact of bank specific and macroeconomic factors on bank profitability:a case of Nepalese commercial banks Material Type: printed text Authors: Anup Paudel, Author Publication Date: 2016 Size: GRP/Thesis Accompanying material: 6/B Languages : English Descriptors: Macroeconomics Class number: 332.632 Abstract: The existence, growth and survival of a business organization mostly depend upon the profit which an organization is able to earn. The profitability of the organization will definitely contribute to the economic development of the nation by way of providing additional employment and tax revenue to government exchequer. Moreover, it will contribute the income of the investors by having a higher dividend and thereby improve the standard of living of the people Ayanda et al (2013). Alexiou (2009) suggested that for any consistent or systematic size the profitability relationship is relatively weak. The determinants of profitability and theories thereof used in this review are those frequently described in conventional banking studies and literature. Return on assets, return on equity and net interest margin is a major part of banks’ profit; this is basically why the financial intermediaries try to offer lowest returns to savers and lend funds to borrowers at the highest possible interest rates
The major purpose of this study is to examine the relationship between credit risk and bank performance in Nepalese commercial banks. The specific objectives are: to analyze the structure and pattern of dependent (ROA, ROE and net interest margin) and independent variables (credit risk, liquidity, capital adequacy ratio, and deposit and bank size), to examine the relationship between credit risk and bank performance, to identify the effect of capital adequacy ratio, liquidity and deposit on bank performance, to examine the relationship between bank size and bank performance and to examine the relationship between macro-economic factors such as GDP growth, inflation and interest rate on profitability of the bank.
This study based on the secondary source of data which were gather for a sample of 18 commercial banks of Nepal within the time period from 2007/08 to 2013/14, leading to the total of 126 observations The secondary data have been obtained from Banking and Financial Statistics and Bank Supervision report published by Nepal Rastra Bank and annual report of selected banks. The research design adopted in this study is descriptive and causal comparative types as it deals with relationship of bank specific and macroeconomic factor like credit risk, liquidity, capital adequacy ratio, deposit, bank size, GDP, inflation and interest rate with ROA (return on assets), ROE (return on equity) and NIM (net interest margin). The statistical methods used in the analysis are descriptive statistics, correlation analysis and regression analysis.
The result revealed that the liquidity, capital adequacy ratio, deposit, GDP and interest rate are positively correlated with ROA. It indicates that higher the liquidity, capital adequacy ratio, deposit, GDP and interest rate, higher would be the ROA. Study reveals that credit risk, bank size and inflation are negatively correlated with ROA which reveals that increase in credit risk, bank size and inflation leads to decrease in net interest margin. The result also shows that liquidity, capital adequacy ratio, deposit, GDP and interest rate positively correlated to ROE. Study reveals that credit risk, bank size and inflation are negatively correlated to ROE. The result also shows that liquidity, deposit, bank size, GDP and interest rate positively correlated to NIM. Study reveals that credit risk, capital adequacy ratio and inflation are negatively correlated to NIM. The beta coefficient is positive for liquidity, capital adequacy ratio, deposit, GDP and interest rate and bank performance whereas the beta coefficient is negative for credit risk, bank size and inflation and bank performance. The beta coefficient is significant for capital adequacy ratio, credit risk, liquidity ratio and interest rate at 5 percent level of significance.
The major conclusion of this study is that bank performance of Nepalese commercial banks is affected by bank specific and macroeconomic factors and its management. Liquidity, capital adequacy ratio, deposits, GDP and interest rate is factor which has significant positive effect on return on assets and return on equity of Nepalese commercial banks. It indicates higher the liquidity, capital adequacy ratio, deposits, GDP and interest rate, higher would be the return on assets and return on equity. However, credit risk, bank size and inflation have significant negative effect on return on assets and return on equity. It indicates that higher the credit risk, bank size and inflation, lower would be the return on assets and return on equity. The study also concludes that liquidity, deposit, bank size, GDP and interest rate have significant positive effect on net interest margin of Nepalese commercial banks. Higher the liquidity, deposit, bank size, GDP and interest rate, higher would be net interest margin of banks. However, credit risk, capital adequacy ratio and inflation have significant negative effect on net interest margin.
Impact of bank specific and macroeconomic factors on bank profitability:a case of Nepalese commercial banks [printed text] / Anup Paudel, Author . - 2016 . - ; GRP/Thesis + 6/B.
Languages : English
Descriptors: Macroeconomics Class number: 332.632 Abstract: The existence, growth and survival of a business organization mostly depend upon the profit which an organization is able to earn. The profitability of the organization will definitely contribute to the economic development of the nation by way of providing additional employment and tax revenue to government exchequer. Moreover, it will contribute the income of the investors by having a higher dividend and thereby improve the standard of living of the people Ayanda et al (2013). Alexiou (2009) suggested that for any consistent or systematic size the profitability relationship is relatively weak. The determinants of profitability and theories thereof used in this review are those frequently described in conventional banking studies and literature. Return on assets, return on equity and net interest margin is a major part of banks’ profit; this is basically why the financial intermediaries try to offer lowest returns to savers and lend funds to borrowers at the highest possible interest rates
The major purpose of this study is to examine the relationship between credit risk and bank performance in Nepalese commercial banks. The specific objectives are: to analyze the structure and pattern of dependent (ROA, ROE and net interest margin) and independent variables (credit risk, liquidity, capital adequacy ratio, and deposit and bank size), to examine the relationship between credit risk and bank performance, to identify the effect of capital adequacy ratio, liquidity and deposit on bank performance, to examine the relationship between bank size and bank performance and to examine the relationship between macro-economic factors such as GDP growth, inflation and interest rate on profitability of the bank.
This study based on the secondary source of data which were gather for a sample of 18 commercial banks of Nepal within the time period from 2007/08 to 2013/14, leading to the total of 126 observations The secondary data have been obtained from Banking and Financial Statistics and Bank Supervision report published by Nepal Rastra Bank and annual report of selected banks. The research design adopted in this study is descriptive and causal comparative types as it deals with relationship of bank specific and macroeconomic factor like credit risk, liquidity, capital adequacy ratio, deposit, bank size, GDP, inflation and interest rate with ROA (return on assets), ROE (return on equity) and NIM (net interest margin). The statistical methods used in the analysis are descriptive statistics, correlation analysis and regression analysis.
The result revealed that the liquidity, capital adequacy ratio, deposit, GDP and interest rate are positively correlated with ROA. It indicates that higher the liquidity, capital adequacy ratio, deposit, GDP and interest rate, higher would be the ROA. Study reveals that credit risk, bank size and inflation are negatively correlated with ROA which reveals that increase in credit risk, bank size and inflation leads to decrease in net interest margin. The result also shows that liquidity, capital adequacy ratio, deposit, GDP and interest rate positively correlated to ROE. Study reveals that credit risk, bank size and inflation are negatively correlated to ROE. The result also shows that liquidity, deposit, bank size, GDP and interest rate positively correlated to NIM. Study reveals that credit risk, capital adequacy ratio and inflation are negatively correlated to NIM. The beta coefficient is positive for liquidity, capital adequacy ratio, deposit, GDP and interest rate and bank performance whereas the beta coefficient is negative for credit risk, bank size and inflation and bank performance. The beta coefficient is significant for capital adequacy ratio, credit risk, liquidity ratio and interest rate at 5 percent level of significance.
The major conclusion of this study is that bank performance of Nepalese commercial banks is affected by bank specific and macroeconomic factors and its management. Liquidity, capital adequacy ratio, deposits, GDP and interest rate is factor which has significant positive effect on return on assets and return on equity of Nepalese commercial banks. It indicates higher the liquidity, capital adequacy ratio, deposits, GDP and interest rate, higher would be the return on assets and return on equity. However, credit risk, bank size and inflation have significant negative effect on return on assets and return on equity. It indicates that higher the credit risk, bank size and inflation, lower would be the return on assets and return on equity. The study also concludes that liquidity, deposit, bank size, GDP and interest rate have significant positive effect on net interest margin of Nepalese commercial banks. Higher the liquidity, deposit, bank size, GDP and interest rate, higher would be net interest margin of banks. However, credit risk, capital adequacy ratio and inflation have significant negative effect on net interest margin.
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Barcode Call number Media type Location Section Status 335/D 332.632 PAU Thesis/Dissertation Uniglobe Library Social Sciences Available Impact of bank specific and macroeconomic factors on the liquidity of Nepalese commercial banks: a comparative study of public banks, joint venture banks and private banks / Suraksha Baskota
Title : Impact of bank specific and macroeconomic factors on the liquidity of Nepalese commercial banks: a comparative study of public banks, joint venture banks and private banks Material Type: printed text Authors: Suraksha Baskota, Author Publication Date: 2017 Pagination: 110p. Size: GRP/Thesis Accompanying material: 8/B Languages : English Descriptors: Macroeconomics Class number: 332.632 Abstract: An asset is generally described as liquid if it can be easily and quickly sold at a minimal cost and price impact (Allen and Bolton, 2004). Liquidity management is a concept that has been receiving serious attention all over the world especially with the current financial situations and the state of the world economy. Liquidity is an ability of the bank to pay its short-term obligation to its depositor and creditors (Eljelly, 2004).Nwaezeaku (2006) argued that liquidity in banking measures the availability of cash and the rate at which current assets are converted into cash to meet ordinary and extraordinary request.Liquidity shortage can cause great damage to a banks operation (Ogbuabor and Malaolu, 2013). When crises are likely to arrive, banks seem less willing to lend and hold more liquidity due to the low level of liquidity in the market for external finance (Acharya and Naqvi, 2012). Stakeholders have interest in the liquidity position of a bank. Banking firm should ensure that it does not suffer from lack of or excess liquidity to cover up its short term obligation (Kurawa and Abubakar, 2014). Kumar and Yadav (2013) described liquidity as a bank capacity to increase fund in assets and meet both expected and unexpected cash and collateral obligation at reasonable cost and without incurring unacceptable losses.
There are differences in public sector bank, joint venture banks and domestic private banks in terms of liquidity, non-performing loan, return on assets, capital adequacy ratio, bank size, gross domestic product, inflation and treasury bill rate.Chagwiza (2014) supported that there is a positive link between bank liquidity and capital adequacy, total assets, gross domestic productwhereas liquidity is negatively correlated with inflation.Singh and Sharma (2016) revels thatbank size and GDP were found to have a negative effect on bank liquidity.Baral (2005) argued that high level of liquidity is deteriorating profitability.
The major objective of the study is to assess impact of bank specific factor and macroeconomic factor onthe liquidity of Nepalese commercial banks. The study is based on secondary data of 23 commercial banks with 138 observations for the period of 2009/10 to 2014/15. The main source of data include various issues of Banking and Financial Statistics, Quarterly Economic Bulletin, Bank Supervision Report published by Nepal Rastra Bank and Annual Reports of selected commercial bank. The pooled cross sectional data analysis has been undertaken in the study. The research design adopted in this study is descriptive and causal comparative research design as it deals with assess impact of bank specific factor and macroeconomic factor on Nepalese commercial bank liquidity.
The result shows that NBL has highest liquid assets to total assets (0.36 times) and NBBL has highest liquid assets to total deposit (0.40 times).Similarly, RBB has highest non-performing loan (7.05 percent), JBL has highest capital adequacy ratio (28.15 percent), NBBL has highest return on assets (3.02 percent) and RBB has highest bank size (114.59 billion).
The descriptive statistics for the public banks revels that the liquid assets to total assets, liquid assets to total deposit , non-performing loan , return on assets, capital adequacy ratio, bank size, gross domestic product, inflation and treasury bill rate is 0.27 times, 0.33 times, 6.05 percent, 1.91 percent, 2.57 percent, 84.91 billion, 4.08 percent, 8.93 percent and 3.19 percentrespectively.Likewise,the descriptive statistics for the joint venture banks revels that the liquid assets to total assets, liquid assets to total deposit, non-performing loan, return on assets, capital adequacy ratio, bank size, gross domestic product, inflation and treasury bill rate is 0.27 times, 0.31 times, 1.96 percent, 2.15 percent, 11.84 percent, 54.18 billion, 4.08 percent, 8.93 percent and 3.19 percent respectively. Similarly, the descriptive statistics for the private banks revels that the liquid assets to total assets, liquid assets to total deposit, non-performing loan, return on assets, capital adequacy ratio, bank size, gross domestic product, inflation and treasury bill rate is 0.26 times, 0.30 times, 1.57 percent, 1.38 percent, 14.40 percent, 29.98 billion, 4.08 percent, 8.93 percent and 3.19 percent respectively.
In case of public banks, the study concludes that non-performing loan, return on assets, bank size, inflation and treasury bill rate has negative relation with liquid assets to total assets. Similarly, capital adequacy ratio and gross domestic product has positive relation with liquid assets to total assets.On other hand the study shows that non-performing loan, return on assets, inflation and treasury bill rate has negative relation with liquid assets to total deposit. Similarly, capital adequacy ratio bank size, and gross domestic product has positive relation with liquid assets to total deposit.In case of joint venture banks, the study finds that non-performing loan, return on assets, bank size,and treasury bill rate has negative relation with liquid assets to total assets. Similarly, capital adequacy ratio and gross domestic product has positive relation with liquid assets to total assets. On other hand the study shows that non-performing loan, return on assets, bank size, inflation and treasury bill rate has negative relation with liquid assets to total deposit. Similarly, capital adequacy ratio and gross domestic product has positive relation with liquid assets to total deposit.The result showsthat non-performing loan, return on assets, bank size, gross domestic product and treasury bill rate has negative relation with liquid assets to total assets of private banks. Similarly, capital adequacy ratio and inflation has positive relation with liquid assets to total assets of private banks. On other hand the study finds that non-performing loan, return on assets, bank size, gross domestic product and treasury bill rate has negative relation with liquid assets to total deposit of private banks. Similarly, capital adequacy ratio and inflation has positive relation with liquid assets to total deposit of private banks.
The regression result shows that non-performing loan, return on assets, bank size, inflation and treasury bill rate have negative and significant impact on liquid assets to total assets in case of public banks. Similarly, capital adequacy ratio and gross domestic product has positive impact on liquid assets to total assets in case of public banks. On other hand the study finds that non-performing loan, return on assets, inflation and treasury bill rate has negative beta coefficient with liquid assets to total deposit in case of public banks. Similarly, capital adequacy ratio bank size, and gross domestic product has positive and significant impact on liquid assets to total deposit in case of public banks.Likewise, the study finds that non-performing loan, return on assets, bank size, and treasury bill rate has negative impact on liquid assets to total assets in case of joint venture banks. Similarly, capital adequacy ratio, gross domestic product and inflation has positive beta coefficient with liquid assets to total assets in case of joint venture banks. On other hand the study finds that non-performing loan, return on assets, bank size, inflation and treasury bill rate has negative and significant impact on liquid assets to total deposit. Similarly, capital adequacy ratio and gross domestic product has positive beta coefficient on liquid assets to total deposit in case of joint venture banks.The result showsthat non-performing loan, return on assets, bank size, gross domestic product and treasury bill rate has negative impact on liquid assets to total assets of private banks. Similarly, capital adequacy ratio and inflation has positive impact on liquid assets to total assets of private banks. On other hand the study finds that non-performing loan, return on assets, bank size, gross domestic product and treasury bill rate has negative impact on liquid assets to total deposit of private banks. Similarly, capital adequacy ratio and inflation has positive and significant impact with liquid assets to total deposit of private banks.
Impact of bank specific and macroeconomic factors on the liquidity of Nepalese commercial banks: a comparative study of public banks, joint venture banks and private banks [printed text] / Suraksha Baskota, Author . - 2017 . - 110p. ; GRP/Thesis + 8/B.
Languages : English
Descriptors: Macroeconomics Class number: 332.632 Abstract: An asset is generally described as liquid if it can be easily and quickly sold at a minimal cost and price impact (Allen and Bolton, 2004). Liquidity management is a concept that has been receiving serious attention all over the world especially with the current financial situations and the state of the world economy. Liquidity is an ability of the bank to pay its short-term obligation to its depositor and creditors (Eljelly, 2004).Nwaezeaku (2006) argued that liquidity in banking measures the availability of cash and the rate at which current assets are converted into cash to meet ordinary and extraordinary request.Liquidity shortage can cause great damage to a banks operation (Ogbuabor and Malaolu, 2013). When crises are likely to arrive, banks seem less willing to lend and hold more liquidity due to the low level of liquidity in the market for external finance (Acharya and Naqvi, 2012). Stakeholders have interest in the liquidity position of a bank. Banking firm should ensure that it does not suffer from lack of or excess liquidity to cover up its short term obligation (Kurawa and Abubakar, 2014). Kumar and Yadav (2013) described liquidity as a bank capacity to increase fund in assets and meet both expected and unexpected cash and collateral obligation at reasonable cost and without incurring unacceptable losses.
There are differences in public sector bank, joint venture banks and domestic private banks in terms of liquidity, non-performing loan, return on assets, capital adequacy ratio, bank size, gross domestic product, inflation and treasury bill rate.Chagwiza (2014) supported that there is a positive link between bank liquidity and capital adequacy, total assets, gross domestic productwhereas liquidity is negatively correlated with inflation.Singh and Sharma (2016) revels thatbank size and GDP were found to have a negative effect on bank liquidity.Baral (2005) argued that high level of liquidity is deteriorating profitability.
The major objective of the study is to assess impact of bank specific factor and macroeconomic factor onthe liquidity of Nepalese commercial banks. The study is based on secondary data of 23 commercial banks with 138 observations for the period of 2009/10 to 2014/15. The main source of data include various issues of Banking and Financial Statistics, Quarterly Economic Bulletin, Bank Supervision Report published by Nepal Rastra Bank and Annual Reports of selected commercial bank. The pooled cross sectional data analysis has been undertaken in the study. The research design adopted in this study is descriptive and causal comparative research design as it deals with assess impact of bank specific factor and macroeconomic factor on Nepalese commercial bank liquidity.
The result shows that NBL has highest liquid assets to total assets (0.36 times) and NBBL has highest liquid assets to total deposit (0.40 times).Similarly, RBB has highest non-performing loan (7.05 percent), JBL has highest capital adequacy ratio (28.15 percent), NBBL has highest return on assets (3.02 percent) and RBB has highest bank size (114.59 billion).
The descriptive statistics for the public banks revels that the liquid assets to total assets, liquid assets to total deposit , non-performing loan , return on assets, capital adequacy ratio, bank size, gross domestic product, inflation and treasury bill rate is 0.27 times, 0.33 times, 6.05 percent, 1.91 percent, 2.57 percent, 84.91 billion, 4.08 percent, 8.93 percent and 3.19 percentrespectively.Likewise,the descriptive statistics for the joint venture banks revels that the liquid assets to total assets, liquid assets to total deposit, non-performing loan, return on assets, capital adequacy ratio, bank size, gross domestic product, inflation and treasury bill rate is 0.27 times, 0.31 times, 1.96 percent, 2.15 percent, 11.84 percent, 54.18 billion, 4.08 percent, 8.93 percent and 3.19 percent respectively. Similarly, the descriptive statistics for the private banks revels that the liquid assets to total assets, liquid assets to total deposit, non-performing loan, return on assets, capital adequacy ratio, bank size, gross domestic product, inflation and treasury bill rate is 0.26 times, 0.30 times, 1.57 percent, 1.38 percent, 14.40 percent, 29.98 billion, 4.08 percent, 8.93 percent and 3.19 percent respectively.
In case of public banks, the study concludes that non-performing loan, return on assets, bank size, inflation and treasury bill rate has negative relation with liquid assets to total assets. Similarly, capital adequacy ratio and gross domestic product has positive relation with liquid assets to total assets.On other hand the study shows that non-performing loan, return on assets, inflation and treasury bill rate has negative relation with liquid assets to total deposit. Similarly, capital adequacy ratio bank size, and gross domestic product has positive relation with liquid assets to total deposit.In case of joint venture banks, the study finds that non-performing loan, return on assets, bank size,and treasury bill rate has negative relation with liquid assets to total assets. Similarly, capital adequacy ratio and gross domestic product has positive relation with liquid assets to total assets. On other hand the study shows that non-performing loan, return on assets, bank size, inflation and treasury bill rate has negative relation with liquid assets to total deposit. Similarly, capital adequacy ratio and gross domestic product has positive relation with liquid assets to total deposit.The result showsthat non-performing loan, return on assets, bank size, gross domestic product and treasury bill rate has negative relation with liquid assets to total assets of private banks. Similarly, capital adequacy ratio and inflation has positive relation with liquid assets to total assets of private banks. On other hand the study finds that non-performing loan, return on assets, bank size, gross domestic product and treasury bill rate has negative relation with liquid assets to total deposit of private banks. Similarly, capital adequacy ratio and inflation has positive relation with liquid assets to total deposit of private banks.
The regression result shows that non-performing loan, return on assets, bank size, inflation and treasury bill rate have negative and significant impact on liquid assets to total assets in case of public banks. Similarly, capital adequacy ratio and gross domestic product has positive impact on liquid assets to total assets in case of public banks. On other hand the study finds that non-performing loan, return on assets, inflation and treasury bill rate has negative beta coefficient with liquid assets to total deposit in case of public banks. Similarly, capital adequacy ratio bank size, and gross domestic product has positive and significant impact on liquid assets to total deposit in case of public banks.Likewise, the study finds that non-performing loan, return on assets, bank size, and treasury bill rate has negative impact on liquid assets to total assets in case of joint venture banks. Similarly, capital adequacy ratio, gross domestic product and inflation has positive beta coefficient with liquid assets to total assets in case of joint venture banks. On other hand the study finds that non-performing loan, return on assets, bank size, inflation and treasury bill rate has negative and significant impact on liquid assets to total deposit. Similarly, capital adequacy ratio and gross domestic product has positive beta coefficient on liquid assets to total deposit in case of joint venture banks.The result showsthat non-performing loan, return on assets, bank size, gross domestic product and treasury bill rate has negative impact on liquid assets to total assets of private banks. Similarly, capital adequacy ratio and inflation has positive impact on liquid assets to total assets of private banks. On other hand the study finds that non-performing loan, return on assets, bank size, gross domestic product and treasury bill rate has negative impact on liquid assets to total deposit of private banks. Similarly, capital adequacy ratio and inflation has positive and significant impact with liquid assets to total deposit of private banks.
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Barcode Call number Media type Location Section Status 291/D 332.632 BAS Thesis/Dissertation Uniglobe Library Social Sciences Available Impact of bank specific and macroeconomic variables on the performance of commercial banks of Nepal / Rabi Shrestha
Title : Impact of bank specific and macroeconomic variables on the performance of commercial banks of Nepal Material Type: printed text Authors: Rabi Shrestha, Author Publication Date: 2015 Pagination: 87p. Size: GRP/Thesis Accompanying material: 4/B General note: Including biblography Languages : English Descriptors: Banks
Banks and banking
Economic policy
Macroeconomics-Econometric modelsKeywords: 'macroeconomics economic policy banks banks and banking nepal' Class number: 332.632 Impact of bank specific and macroeconomic variables on the performance of commercial banks of Nepal [printed text] / Rabi Shrestha, Author . - 2015 . - 87p. ; GRP/Thesis + 4/B.
Including biblography
Languages : English
Descriptors: Banks
Banks and banking
Economic policy
Macroeconomics-Econometric modelsKeywords: 'macroeconomics economic policy banks banks and banking nepal' Class number: 332.632 Hold
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Barcode Call number Media type Location Section Status 114/D 332.632 SHR Thesis/Dissertation Uniglobe Library Social Sciences Available Impact of bank specific variables and macroeconomic variables on deposit and lending of Nepalese commercial banks / Karun Bhandari
Title : Impact of bank specific variables and macroeconomic variables on deposit and lending of Nepalese commercial banks Material Type: printed text Authors: Karun Bhandari, Author Publication Date: 2016 Pagination: 82p. Size: GRP/Thesis Accompanying material: 6/B Languages : English Descriptors: Macroeconomics Class number: 332.632 Abstract: Bank acts as an intermediary for transformation of fund from surplus unit to deficit unit in an effective and efficient manner. Banks collect deposits from general public providing certain rate of interest in order to provide loans to different needy persons or business houses at higher interest rate. In this way financial institutions makes profit and profit is essential for the survival of growth (Ojwiya, 2009). Lending of funds constitutes the largest single income-earning asset in the portfolio of most deposit money banks. Hence, banks deploy huge resources to estimate, monitor and manage the quality of their loan portfolio (Olokoyo, 2011).
Deposits are the most secured and liquid financial assets available, which can accelerate bank lending to various sectors. In this nexus, it is important to state that deposit mobilization behavior in any economy is closely tied with the lending behaviors and as a consequence an analysis of the determinants of bank deposits is imperative (Deaton, 1991). Lending may be on short, medium or long-term basis which is one of the services that banks do render to their customers. In other words, banks grant loans and advances to individuals, business organizations as well as government in order to enable them embark on investment and development activities as a means of aiding their growth in particular or contributing toward the economic development of a country (Felicia, 2011).
Deposit and lending activity plays a vital role for success of financial institution. There are different bank specific as well as macroeconomic factors influencing bank deposit and lending. Macroeconomic factors effecting bank lending and deposit are real interest rate, gross domestic product, exchange rate and inflation whereas bank specific factor such as net income, volume of deposit and lending, borrowing, investment and spread rate. All these variables have impact on bank deposit and lending activities of financial institutions (Kraft, 2000). Bernanke et al. (1991) showed a positive relationship between loan growth at individual banks and investment ratios. Cole et al. (2004) revealed that US commercial banks loan growth was more responsive to investment ratios during and after the recent financial crisis but not at other times. Pruteanu and Podpiera (2007) analyzed the impact of gross domestic product growth on growth rate of total loans in Cezch banks The results showed strong positive effect of GDP growth on the growth rate of loans.Bank investment have positive relation with bank lending (Mccarthyet al.2010).
Kassri and Kassim (2009) found positive relationship between the level of Islamic bank deposit and interest rate. Bhimisetty and Samantaray (2013) revealed bank deposit have positive relationship with bank investments. Muhammad et al. (2011) found negative relationship for both inflation and base lending rate on bank deposits. Masson et al. (1998) revealed that GDP growth and changes in the terms of trade have positive relationship with the savings behavior in OECD countries. The study further indicates that interest rates had no significant effect on private or national saving. The study found that inflation rate has negative relationship with saving.
The major purpose of this study is to analyze the impact of bank specific variables and macroeconomic variables on bank deposit and lending of Nepalese commercial banks. The specific objectives of this study are: a)to determine the impact of macroeconomic variables (GDP growth, inflation and per capita income) on deposit activity of commercial banks b) to analyze the impact of bank specific variables (net income, interest rate, borrowing, interest spread, investment) on lending of Nepalese commercial banks. c)to identify the impact of macroeconomic variables (GDP growth, inflation and per capita income) on deposit activity of commercial banks d) to evaluate the impact of bank specific variables (net income, interest rate, borrowing, interest spread, investment) on lending of Nepalese commercial banks.
This study has employed descriptive research design and causal comparative research design to deal with issues associated with factors influencing bank deposit and lending of the commercial banks in the context of Nepal. The descriptive research design has been adopted for fact finding and search adequate information about impact of firm-specific and macroeconomic variables on deposit and lending of Nepalese commercial banks. The secondary data for the study are collected from various sources such as annual report of the sample banks, NRB data base, books and journals.
The result shows that there is positive relationship of bank deposit with net income, investment, interest rate spread, inflation, GDP growth rate and per capita income. Likewise, the result shows that there is negative relationship of bank deposits with borrowing. The result also shows that there is positive relationship of bank loan and advances with net income, bank investment, GDP growth rate and per capita income whereas there is negative relationship of bank lending with inflation, bank borrowing and interest rate spread. The study reveals that net income, interest rate spread, bank investment and gross domestic product growth rate are among the significant variables that affect the deposit and lending in the context of Nepalese commercial banks.
Impact of bank specific variables and macroeconomic variables on deposit and lending of Nepalese commercial banks [printed text] / Karun Bhandari, Author . - 2016 . - 82p. ; GRP/Thesis + 6/B.
Languages : English
Descriptors: Macroeconomics Class number: 332.632 Abstract: Bank acts as an intermediary for transformation of fund from surplus unit to deficit unit in an effective and efficient manner. Banks collect deposits from general public providing certain rate of interest in order to provide loans to different needy persons or business houses at higher interest rate. In this way financial institutions makes profit and profit is essential for the survival of growth (Ojwiya, 2009). Lending of funds constitutes the largest single income-earning asset in the portfolio of most deposit money banks. Hence, banks deploy huge resources to estimate, monitor and manage the quality of their loan portfolio (Olokoyo, 2011).
Deposits are the most secured and liquid financial assets available, which can accelerate bank lending to various sectors. In this nexus, it is important to state that deposit mobilization behavior in any economy is closely tied with the lending behaviors and as a consequence an analysis of the determinants of bank deposits is imperative (Deaton, 1991). Lending may be on short, medium or long-term basis which is one of the services that banks do render to their customers. In other words, banks grant loans and advances to individuals, business organizations as well as government in order to enable them embark on investment and development activities as a means of aiding their growth in particular or contributing toward the economic development of a country (Felicia, 2011).
Deposit and lending activity plays a vital role for success of financial institution. There are different bank specific as well as macroeconomic factors influencing bank deposit and lending. Macroeconomic factors effecting bank lending and deposit are real interest rate, gross domestic product, exchange rate and inflation whereas bank specific factor such as net income, volume of deposit and lending, borrowing, investment and spread rate. All these variables have impact on bank deposit and lending activities of financial institutions (Kraft, 2000). Bernanke et al. (1991) showed a positive relationship between loan growth at individual banks and investment ratios. Cole et al. (2004) revealed that US commercial banks loan growth was more responsive to investment ratios during and after the recent financial crisis but not at other times. Pruteanu and Podpiera (2007) analyzed the impact of gross domestic product growth on growth rate of total loans in Cezch banks The results showed strong positive effect of GDP growth on the growth rate of loans.Bank investment have positive relation with bank lending (Mccarthyet al.2010).
Kassri and Kassim (2009) found positive relationship between the level of Islamic bank deposit and interest rate. Bhimisetty and Samantaray (2013) revealed bank deposit have positive relationship with bank investments. Muhammad et al. (2011) found negative relationship for both inflation and base lending rate on bank deposits. Masson et al. (1998) revealed that GDP growth and changes in the terms of trade have positive relationship with the savings behavior in OECD countries. The study further indicates that interest rates had no significant effect on private or national saving. The study found that inflation rate has negative relationship with saving.
The major purpose of this study is to analyze the impact of bank specific variables and macroeconomic variables on bank deposit and lending of Nepalese commercial banks. The specific objectives of this study are: a)to determine the impact of macroeconomic variables (GDP growth, inflation and per capita income) on deposit activity of commercial banks b) to analyze the impact of bank specific variables (net income, interest rate, borrowing, interest spread, investment) on lending of Nepalese commercial banks. c)to identify the impact of macroeconomic variables (GDP growth, inflation and per capita income) on deposit activity of commercial banks d) to evaluate the impact of bank specific variables (net income, interest rate, borrowing, interest spread, investment) on lending of Nepalese commercial banks.
This study has employed descriptive research design and causal comparative research design to deal with issues associated with factors influencing bank deposit and lending of the commercial banks in the context of Nepal. The descriptive research design has been adopted for fact finding and search adequate information about impact of firm-specific and macroeconomic variables on deposit and lending of Nepalese commercial banks. The secondary data for the study are collected from various sources such as annual report of the sample banks, NRB data base, books and journals.
The result shows that there is positive relationship of bank deposit with net income, investment, interest rate spread, inflation, GDP growth rate and per capita income. Likewise, the result shows that there is negative relationship of bank deposits with borrowing. The result also shows that there is positive relationship of bank loan and advances with net income, bank investment, GDP growth rate and per capita income whereas there is negative relationship of bank lending with inflation, bank borrowing and interest rate spread. The study reveals that net income, interest rate spread, bank investment and gross domestic product growth rate are among the significant variables that affect the deposit and lending in the context of Nepalese commercial banks.
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